I Just Received A Modestly Large Inheritance But It’s Not Invested

In the event you suddenly receive a windfall of money, there is no question that it can make anyone nervous and excited. The idea that you now have an influx of cash all of a sudden allows you to do many things, some of which are better ideas than others. 

For one Redditor, receiving an inheritance of approximately $450,000 after taxes is a significant windfall. With the money currently sitting in an account earning a small amount of interest, the Redditor posting in r/Bogleheads is looking for advice on how best to invest this money over the next 20 years. 

Receiving An Inheritance

From this Redditor, we learn that this person recently received this $450,000 amount and now has it sitting in a high-yield savings account. As of mid-July 2025, the highest rate for a high-yield savings account is around 4.3%, which means the Redditor is earning just over $20,000 annually. 

Right now, we know that the Redditor doesn’t need the money, so they indicate they can put this money aside for the next 20 years. This is a very fortunate financial position to be in, and it’s also a strong indicator that the Redditor doesn’t have any significant debt. 

They do mention having a mortgage, but with a 2.7% interest rate, paying off the mortgage isn’t a necessity. Whether or not there’s a mortgage, this money is life-changing, so the Redditor must invest it appropriately so that in 20 years, as it’s enough to do something truly special. 

What Not To Do

Before jumping into the financial path forward, it’s also important to consider what not to do immediately. First and foremost, don’t tell anyone about this inheritance outside of any family who already knows. You don’t want or need anyone looking for a handout or coming to you with a “guaranteed” business investment opportunity.

Other recommendations from the r/BogleHeads subreddit include not quitting your job prematurely, avoiding extravagant purchases like a sports car, and being cautious with generosity to family and friends. The Redditor has already paid taxes on the inheritance, so that is out of the way, so now it’s time to just focus on how to earn as much as possible with this money for the future. 

Managing The Inheritance

Now, let’s say the Redditor leaves this money in a high-yield savings account at somewhere like EverBank for the next 20 years. Assuming the interest rate never changes, which it undoubtedly will, hypothetically, the Redditor, without any additional deposits, is looking at just over $1 million in savings.

However, if the Redditor wants to be smart, the better move is to take a look at some individual ETFs and “chill,” as the comment section of this post suggests. For example, investing in VOO, the Vanguard S&P 500 ETF, which is up 2.66% this year already and has a 1-year return of 13.82%. If this were to repeat itself, the Redditor would find themselves with $512,190 in just 12 months of investing. 

With VOO, you get an ETF that is heavy into tech stocks like Apple, Microsoft, and NVIDIA, so you get all of their upside. However, you also have plenty of diversity with strong positions in other sectors, such as financial services, healthcare, energy, and utility stocks. These latter investments will help protect the Redditor’s downside while the tech sector is volatile. 

Alternatively, another wise ETF investment is VTI, the Vanguard Total Stock Market Index Fund, which is up 2.28% year-to-date. Similar to VOO, VTI is also up 13.84% with a one-year return, indicating a positive upside. The best part is that both of these ETFs bring a strong amount of diversification, while also offering significant upside for long-term growth. 

Even if we were to be somewhat conservative and suggest that these ETFs only average 7% over the next 20 years, the Redditor would still end up with $1.7 million in 20 years, assuming a more aggressive 10% interest rate. They have now earned over $3 million, so the “ETF and chill” idea for this Redditor is a powerful concept. 

Both of these ETFs allow for diversification while taking advantage of large-cap tech stocks, which offer significant downside protection. They also help mitigate the downside by diversifying into other sectors, with no more than 30% of the total portfolio allocated to tech at any given time.